Whether to raise revenue through increasing tax rates or cutting
loopholes has become a central sticking point in the negotiations on a
major debt deal.

The White House has drawn one line in the sand: it argues that tax rates
must go up on income above $250,000 a year, because reducing tax breaks
for the affluent cannot on its own raise the $1.6 trillion in
additional revenue it seeks. Congressional Republicans have drawn
another line: they might accept higher revenue, but only through the
reduction of tax breaks.

But is it even possible to raise $1.6 trillion from wealthy households
without changing tax rates? Experts say it is. But doing so might be
politically infeasible and hugely unpopular, because it would involve
wiping out nearly every deduction, credit and preferential rate those
affluent households claim. ... There would be no deduction for charitable giving, or close to none,
angering wealthy donors and nonprofit directors. The home mortgage
interest deduction would vanish, hurting the housing market just as it
has started to turn around. Preferential tax treatment of capital gains
and dividends would disappear, probably throwing the markets into a
sell-off. The top 1 percent of earners might see their after-tax income
fall as much as 19.8%, according to calculations by the Tax Policy Center.